Business

11:32 am

Fri July 12, 2013

Does The Canadian Rail Explosion Make Pipelines Look Safer?

A police photograph shows burned and wrecked crude oil carrying rail tankers piled up in Lac-Megantic, Quebec, on Monday. Dozens of people died in the disaster.

EPA/Landov

When an oil-laden train derailed last weekend, it turned into an inferno that killed dozens in Lac-Megantic, a small town in Quebec.

This week, the Canadian tragedy is morphing into something very different. It is becoming Exhibit A in the political case for building pipelines — as well as for opposing them.

How could the same tragedy prove opposite points? Listen in to the debate:

"With the ongoing increases in shale oil production in states like North Dakota, Texas, Oklahoma and New Mexico, it's likely that shipments of oil by rail could double again within a few years, significantly increasing the likelihood of a rail disaster in the U.S., like the one in Canada," Mark Perry, a scholar at the American Enterprise Institute, wrote on the conservative research group's website.

Those vast new supplies of oil should be moved through pipelines, not on tracks, he argues.

At the same time, pipeline opponents say the rail catastrophe bolsters their real point — that oil and gas are simply too dangerous to transport by any method over long distances. Lac-Megantic proves that it's time to leave fossil fuels behind and move on to much safer wind- and solar-energy options, the argument goes.

The Canadian calamity will increase "public consciousness of the dangers inherent in transporting oil and oil products," Andrew Leach, an energy economist at the University of Alberta, wrote in an op-ed essay. Moreover, it will lead to "increased calls for alternatives to oil rather than alternative means of transporting oil."

The word battle, being fought out in blog posts and editorial pages, has a focus: the Keystone XL pipeline. The White House is still weighing the potential impact of building a 1,179-mile, 36-inch-diameter oil pipeline, which would transport Canadian heavy crude oil to the Texas Gulf Coast.

Still, the Obama administration has not decided whether to issue a construction permit while awaiting further study. "The State Department is going through the final stages of evaluating the proposal," Obama said last month during a speech about climate change.

Pipeline supporters say that no matter what environmentalists want to dream about for energy in the distant future, the reality today is that the world is thirsty for oil. And that means oil is going to move — one way or another — from the wellhead to the refinery. And right now, Canadian oil production is booming, so it needs to get to refineries and global markets.

As oil production has surged in North America, energy companies have increased the number of U.S. rail shipments of crude oil and refined petroleum products to 356,000 carloads in the first half of this year, up 48 percent from the same period last year, the Energy Information Administration said Wednesday.

Perry of the American Enterprise Institute argues that as these shipments increase, dangers will multiply for people living near railroad tracks. "The Keystone XL pipeline makes perfect economic and perfect environmental sense, and it's only politics that will hold up its approval," he said.

Pipeline opponents say the Lac-Megantic catastrophe should push Obama to commit the nation to building a new infrastructure dedicated to solar and wind power sources. Stopping Keystone now "prevents a massive piece of essentially permanent fossil fuel infrastructure from being established," wrote Chris Tackett, the social media editor for Treehugger, a website focused on "sustainability."

That final report is not expected until at least late summer or early fall. If the project gets a green light from the Obama administration, the pipeline would be carrying 830,000 barrels of oil every day from Canada to U.S. refineries.